ECB’s Schnabel: “Rates Will Probably Remain Stable for Quite Some Time if Nothing Unforeseen Happens”

22 December 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Isabel Schnabel on Monday said that the ECB interest rates were probably facing a long hold, absent an unexpected development.

In a podcast with German daily Frankfurter Allgemeine Zeitung, Schnabel said, “I am among those who tend to emphasize the upside risks; that is, I believe the upside risks dominate, and that leads me to the assessment that interest rates will probably remain stable for quite some time if nothing unforeseen happens.”

She had not said in a recent interview that rates should be hiked, she explained. “Rather, I said I assume that rates do not need to fall again. That is a very important distinction, where I may have been misunderstood.”

Possibly the misunderstanding “simply has to do with the fact that if people prefer higher rates, they then immediately say that I called for a rate hike,” she said. “But I did not actually say that in the interview either.”

In fact, she said, “I think, at the moment, no rate hikes are to be expected in the foreseeable future.” However, she noted the “changed macroeconomic and geopolitical situation in which there could be stronger fragmentation, also structurally, that in fact more inflationary forces are at work than disinflationary ones.”

“And that would also, for me, speak for the fact that we also do not return to the time before the pandemic, in which inflation was much too low, but rather that we tend to have more inflationary forces, which at some point will then lead to having to raise rates again, but not in the foreseeable future,” she said.